TEJON RANCH: MANAGEMENT REPORT AND ANALYSIS OF THE FINANCIAL POSITION AND OPERATING RESULTS (Kind 10-Q)

Ahead-Wanting Statements
This Quarterly Report on Kind 10-Q incorporates forward-looking statements,
together with with out limitation statements concerning strategic alliances, the
almond, pistachio and grape industries, the long run plantings of everlasting crops,
future yields, costs and water availability for the Firm's crops and actual
property operations, future costs, manufacturing and demand for oil and different
minerals, future improvement of the Firm's property, future income and
revenue of its jointly-owned journey plaza and different three way partnership operations,
potential losses to Tejon Ranch Co. and its subsidiaries (the Firm, Tejon,
we, us, and our), because of pending environmental proceedings, the adequacy
of future money flows to fund our operations, and of present property and contracts
to satisfy our water and different commitments, market worth dangers related to
funding and danger administration actions and with respect to stock,
accounts receivable and our personal excellent indebtedness, ongoing negotiations,
the uncertainties concerning the anticipated influence of COVID-19 on the Firm, its
clients and suppliers, and world financial circumstances, and different future occasions
and circumstances. In some instances, these statements are identifiable by way of use of
phrases resembling "anticipate," "imagine," "estimate," "count on," "intend," "plan,"
"venture," "goal," "can," "might," "might," "will," "ought to," "would," "probably,"
and comparable expressions resembling "within the course of." As well as, any statements
that check with projections of our future monetary efficiency, our anticipated
progress, and traits in our enterprise and different characterizations of future occasions
or circumstances are forward-looking statements. We warning you to not place
undue reliance on these forward-looking statements. These forward-looking
statements will not be a assure of future efficiency and are topic to
assumptions and contain recognized and unknown dangers, uncertainties and different
necessary components that might trigger the precise outcomes, efficiency or
achievements of the Firm, or trade outcomes, to vary materially from any
future outcomes, efficiency, or achievement implied by such forward-looking
statements. These dangers, uncertainties and necessary components embrace, however are
not restricted to, the impacts of COVID-19 and the actions taken by governments,
companies, and people in response to it, climate, market and financial
forces, availability of financing for land improvement actions, and
competitors and success in acquiring varied governmental approvals and
entitlements for land improvement actions. No assurance will be provided that the
precise future outcomes won't differ materially from the forward-looking
statements that we make for quite a lot of causes, together with these described above
and within the part entitled "Threat Elements" on this report and our most up-to-date
Annual Report on Kind 10-Okay.
OVERVIEW
We're a diversified actual property improvement and agribusiness firm dedicated
to responsibly utilizing our land and sources to satisfy the housing, employment, and
life-style wants of Californians and to create worth for our shareholders. In
help of those goals, now we have been investing in land planning and
entitlement actions for brand new industrial and residential land developments and
in infrastructure enhancements inside our energetic industrial improvement. Our
prime asset is roughly 270,000 acres of contiguous, largely undeveloped
land that, at its most southerly border, is 60 miles north of Los Angeles and,
at its most northerly border, is 15 miles east of Bakersfield.
Enterprise Targets and Methods
Our major enterprise goal is to maximise long-term shareholder worth
by way of the monetization of our land-based property. A key aspect of our technique
is to entitle after which develop large-scale mixed-use grasp deliberate residential
and business/industrial actual property improvement tasks to serve the rising
populations of Southern and Central California. Our mixed-use grasp deliberate
residential developments have been accredited to collectively embrace as much as 35,278
housing items, and greater than 35 million sq. ft of business house. We have now
obtained entitlements on Mountain Villageat Tejon Ranch, or MV, and have
submitted the ultimate tract maps to Kern County. Over the subsequent few years, it's
doable that we are going to be engaged in steady litigation difficult and
defending the entitlements of our Grapevine at Tejon Ranch, or Grapevine, and
Centennial at Tejon Ranch, or Centennial, tasks.
We're at the moment engaged in development, business gross sales and leasing at our
totally operational business/industrial heart, the Tejon Ranch Commerce Middle,
or TRCC. All these efforts are supported by various income streams generated
from different operations, together with business/industrial actual property, farming,
mineral sources, ranch operations, and our varied joint ventures.
Our Enterprise
We at the moment function in 5 reporting segments: business/industrial actual
property improvement; resort/residential actual property improvement; mineral
sources; farming; and ranch operations.
Actions inside the business/industrial actual property improvement phase
embrace planning and allowing of land for improvement; development of
infrastructure; development of pre-leased buildings; development of buildings
to be leased or bought; and the sale of land to 3rd events for their very own
improvement. The business/industrial actual property improvement phase additionally
contains actions associated to communications leases and panorama upkeep
charges.
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On the coronary heart of the business/industrial actual property improvement phase is
TRCC, a 20 million sq. foot business/industrial improvement on Interstate 5
simply north of the Los Angeles basin. Almost six million sq. ft of
industrial, business and retail house has already been developed, together with
distribution facilities for IKEA, Caterpillar, Well-known Footwear, L'Oreal, Tenting
World, and Greenback Basic. TRCC sits on each side of Interstate 5, giving
distributors quick entry to the west coast's principal north-south items
motion hall.
On January 5, 2021, the Kern County Board of Supervisors accredited two
Conditional Use Permits (CUP) which can authorize improvement of multi-family
condominium makes use of inside the TRCC. The accredited CUPs authorize the Firm to
develop as much as a most of 495 multi-family residences, in 13 condominium
buildings, in addition to roughly 6,500 sq. ft of group amenity house
and eight,000 sq. ft of group retail on the bottom ground of a portion of
the residential buildings. The event can be situated on an roughly
23-acre website situated instantly north of the Shops at Tejon. Throughout 2021 the
Firm will dedicate the mandatory sources to advance this new venture at TRCC,
offering the much-needed housing for the hundreds of staff at the moment
working on the varied distribution facilities, retailers, and fast-food
eating places at TRCC.
We're additionally concerned in a number of joint ventures inside TRCC with a number of
companions that assist us broaden our business/industrial enterprise actions:
•A three way partnership with TravelCenters of America, or TA/Petro, owns and operates
two journey and truck cease services, and likewise operates 5 separate gasoline
stations with comfort shops and fast-food eating places inside TRCC-West and
TRCC-East.
•Two joint ventures with Rockefeller Improvement Group, or Rockefeller:
•18-19 West LLC owns 63.5 acres of land for future improvement inside TRCC-West.
In 2019, our 18-19 West LLC three way partnership entered right into a land buy choice
with the identical third-party who bought the 5 West constructing and land, to
buy tons 18 and 19 at a worth of $13.8 million by way of the choice interval
ending Might 21, 2021. If the choice is prolonged to November 21, 2021, the worth
will increase to $15.2 million. The land choice expires within the fourth quarter of
2021; and
•TRCC/Rock Outlet Middle LLC operates the Shops at Tejon, a web leasable
326,000 sq. foot purchasing expertise in TRCC-East;
•4 joint ventures with Majestic Realty Co., or Majestic, to develop, handle,
and function industrial buildings inside TRCC:
•TRC-MRC 1, LLC operates a 480,480 sq. foot industrial constructing in TRCC-East,
which was accomplished throughout 2017 and is totally leased;
•TRC-MRC 2, LLC owns and operates a 651,909 sq. foot constructing in TRCC-West
that's totally leased;
•TRC-MRC 3, LLC operates a 579,040 sq. foot industrial constructing in TRCC-East,
which was accomplished throughout the fourth quarter of 2019 and is totally leased; and
•TRC-MRC 4, LLC was fashioned in 2021 to pursue the event, development,
leasing and administration of a 629,274 sq. foot industrial constructing in
TRCC-East. The development of the constructing is scheduled to start in 2021, with
a goal completion in 2022.
The resort/residential actual property improvement phase is actively concerned in
the land entitlement and improvement course of internally and thru a joint
enterprise. Our energetic developments inside this phase are MV, Centennial, and
Grapevine.
•MV encompasses a complete of 26,417 acres, of which 5,082 acres might be used for a
mixed-use improvement that may embrace housing, retail, and business
parts. MV is entitled for 3,450 properties, 160,000 sq. ft of business
improvement, 750 lodge keys, and greater than 21,335 acres of open house. The
tentative tract map for the primary 4 phases of residential improvement has
been accredited, in addition to the business website plan for the primary section of
business improvement. The Firm is at the moment specializing in the completion of
the ultimate map for first phases of MV, shopper and market analysis research and
wonderful tuning of improvement enterprise plans in addition to defining the capital
funding sources for this improvement.
•The Centennial improvement is a mixed-use grasp deliberate group improvement
encompassing 12,323 acres of our land inside Los Angeles County. Upon completion
of Centennial, it's estimated that the group will embrace roughly
19,333 properties and 10.1 million sq. ft of business improvement. Centennial
had entitlements accredited in December 2018 and obtained legislative approvals in
April 2019 from the Los Angeles County Board of Supervisors; and
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•Grapevine is an 8,010-acre improvement space situated on the San Joaquin Valley
ground space of our lands, adjoining to TRCC. Upon completion of Grapevine, the
group will embrace 12,000 properties, 5.1 million sq. ft for business
improvement, and greater than 3,367 acres of open house and parks. On December 10,
2019, the Kern County Board of Supervisors adopted the supplemental
re-circulated environmental influence report, or EIR, ready in response to a
courtroom ruling and re-approved the event of Grapevine unanimously.
Please check with our Annual Report on Kind 10-Okay for the 12 months ended December 31,
2020, for a extra detailed description of our energetic developments inside the
resort/residential actual property improvement phase.
Our mineral sources phase generates revenues from oil and gasoline royalty
leases, rock and mixture mining leases, a lease with Nationwide Cement Firm
of California Inc., and water gross sales.
The farming phase produces revenues from the sale of wine grapes, almonds, and
pistachios.
Lastly, the ranch operations phase consists of sport administration revenues and
ancillary land makes use of resembling grazing leases and filming.
The COVID-19 Pandemic
The Firm operates solely in California, which continued its vaccine rollout
within the first quarter of 2021 and opened up vaccinations to people who're
16 years outdated and older in April 2021. California is at the moment projected to totally
reopen on June 15, if vaccine provide is ample for Californians aged 16
years and older who want to be inoculated and if hospitalization charges are
secure and low. We'll proceed to offer for the well being and security of our
staff, clients, suppliers and others with whom we associate, whereas
persevering with our enterprise operations on this unprecedented surroundings. Each farm
and workplace staff are required to put on masks together with following different
commonsense well being measures.
Kern and Los Angeles Counties are rated "Orange" underneath California's ranking
system for the unfold of COVID-19, as of the date of this report, representing
reasonable COVID-19 transmission danger underneath California's Blueprint for a Safer
Economic system, or Blueprint. Beneath such circumstances, our farming and mineral
sources segments have operated and will proceed to function as regular whereas
following commonsense well being measures. Our shops can now function at
full capability, following pointers supplied by the Blueprint. Lastly,
eating places can resume indoor eating at 50% capability, which led to the
re-opening of the full-service restaurant at TRCC in April 2021.
Regardless of the present restoration section, uncertainty stays over long-term vaccine
efficacy, virus mutations, vaccine availability, California's means to satisfy
reopening pointers, and continued vaccine adoption for the subsequent section of the
pandemic. The long-term influence of such uncertainties on our enterprise are
at the moment unknown and will fluctuate in scope and severity from the impacts to-date.
The actions taken by governments, different companies, and people in response
to the pandemic did have and can proceed to have an effect our outcomes of
operations and total monetary efficiency. In 2020, we evaluated our
operations for expense reductions and money financial savings by renegotiating contracts
and pricing with a good portion of our distributors, and rightsizing our labor
wants. We'll proceed to watch and consider our wants for expense discount
all through 2021.
Abstract of First Quarter 2021 Efficiency
For the primary three months of 2021, we had a web loss attributable to frequent
stockholders of $1,055,000 in comparison with a web lack of $682,000 throughout the first
three months of 2020. The first driver of this lower was a $1,414,000
lower within the fairness in earnings of unconsolidated joint ventures. For the
quarter, Petro Journey Plaza Holdings skilled important declines in gasoline
margins ensuing from larger gasoline prices. Moreover, full-service restaurant
margins inside the Petro three way partnership decreased attributable to ongoing closures throughout
the interval, pushed by working capability limitations underneath the Blueprint. The
decline in working outcomes from our joint ventures was offset by a $998,000
enhance in mineral sources revenues, pushed by elevated water gross sales due, in
half, to drier circumstances statewide which led to a decrease SWP allocation over the
comparative interval.
This Administration's Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations offers a story dialogue of our outcomes of operations. It
incorporates the outcomes of operations for every reporting phase of the enterprise
and is adopted by a dialogue of our monetary place. It's helpful to learn
the reporting phase data together with Notice 14 (Reporting
Segments and Associated Info) of the Notes to Unaudited Consolidated
Monetary Statements.
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Vital Accounting Insurance policies
The preparation of our interim monetary statements in accordance with usually
accepted accounting rules in the USA, or GAAP, requires us to
make estimates and judgments that have an effect on the reported quantities for property,
liabilities, revenues and bills, and associated disclosure of contingent property
and liabilities. We contemplate an accounting estimate to be crucial if: (1) the
accounting estimate requires us to make assumptions about issues that have been
extremely unsure on the time the accounting estimate was made, and (2) adjustments
within the estimates which might be prone to happen from interval to interval or use of
totally different estimates that we fairly might have used within the present interval,
would have a fabric influence on our monetary situation or outcomes of
operations. On an ongoing foundation, we consider our estimates, together with these
associated to income recognition, impairment of long-lived property, capitalization
of prices, allocation of prices associated to land gross sales and leases, inventory
compensation, our future means to make the most of deferred tax property, and outlined
profit retirement plan. We base our estimates on historic expertise and on
varied different assumptions which might be believed to be affordable underneath the
circumstances, the outcomes of which kind the premise for making judgments about
the carrying values of property and liabilities that aren't readily obvious from
different sources. Precise outcomes might differ from these estimates underneath totally different
assumptions or circumstances.
Throughout the three months ended March 31, 2021, our crucial accounting insurance policies
haven't modified for the reason that submitting of our Annual Report on Kind 10-Okay for the 12 months
ended December 31, 2020. Please check with that submitting for an outline of our
crucial accounting insurance policies. Please additionally check with Notice 1 (Foundation of
Presentation) within the Notes to Unaudited Consolidated Monetary Statements in
this report for newly adopted accounting rules.
Outcomes of Operations by Section
We consider the efficiency of our reporting segments individually to watch the
various factors affecting monetary outcomes. Every reporting phase is topic
to overview and analysis as we monitor present market circumstances, market
alternatives, and accessible sources. The efficiency of every reporting
phase is mentioned under:
Actual Property - Industrial/Industrial:
                                               Three Months Ended March 31,                           Change
($ in hundreds)                                2021                   2020                  $                     %
Industrial/industrial revenues
Pastoria Power Facility                  $        1,016$     1,065$       (49)                   (5) %
TRCC Leasing                                         399                  406                   (7)                   (2) %
TRCC administration charges and reimbursements              186                  236                  (50)                  (21) %
Industrial leases                                    142                  157                  (15)                  (10) %
Communication leases                                 227                  225                    2                     1  %
Landscaping and different                                258                  231                   27                    12  %

Whole business / industrial revenues $ 2,228$ 2,320$ (92)

                   (4) %

Whole business / industrial bills $ 1,552$ 1,931(379)

                  (20) %
Working revenue from
business/industrial                     $          676          $       389$       287                    74  %



•Industrial/industrial actual property improvement phase revenues have been $2,228,000
for the three months ended March 31, 2021, a lower of $92,000, or 4%, from
$2,320,000 for the three months ended March 31, 2020. The lower is primarily
attributed to decrease spark unfold revenues from the Firm's Pastoria Power
Facility lease attributable to decrease vitality demand and lowered reimbursable prices for
Firm's administration of the outlet heart attributable to a discount in personnel.
•Industrial/industrial actual property improvement phase bills have been $1,552,000
for the three months ended March 31, 2021, a lower of $379,000, or 20%, from
$1,931,000 for the three months ended March 31, 2020. The lower is attributed
to decrease payroll and inventory compensation prices, web of capitalization, of
$206,000 and lowered normal and overhead allocations of $107,000 ensuing from
the Firm's 2020 right-sizing initiatives.
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The logistics operators at the moment situated inside TRCC have demonstrated success
in serving all of California and the western area of the USA, and
the Firm showcases their success in its advertising efforts. We'll proceed
to focus our advertising technique for TRCC-East and TRCC-West on the numerous
labor and logistical advantages of our website, the pro-business method of Kern
County, and the demonstrated success of the present tenants and homeowners inside
our improvement. Our location matches inside the logistics mannequin that many
firms are utilizing, which favors massive, centralized distribution services
which have been strategically situated to maximise the steadiness of inbound and
outbound efficiencies, relatively than many decentralized smaller distribution
facilities. The world-class logistics operators situated inside TRCC have
demonstrated success by way of utilization of this mannequin. With entry to markets
of over 40 million folks for next-day supply service, they're additionally
demonstrating success with e-commerce success.
Our Overseas Commerce Zone (FTZ) designation permits companies to safe the various
advantages and price reductions related to streamlined motion of products in
and out of the zone. This FTZ designation is additional supplemented by the
Financial Improvement Incentive Coverage, or EDIP, adopted by the Kern County Board
of Supervisors. EDIP is aimed to broaden and improve the County's competitiveness
by taking affirmative steps to draw new companies and to encourage the
progress and resilience of present companies. EDIP offers incentives resembling
help in acquiring tax incentives, constructing supporting infrastructure, and
workforce improvement.
We imagine that the FTZ and EDIP, together with our means to offer totally
entitled, shovel-ready land parcels to help buildings of any dimension, together with
buildings a million sq. ft or bigger, can present us with a possible
advertising benefit sooner or later. Our advertising efforts goal the Inland
Empire area of Southern California, the Santa Clarita Valley of northern Los
Angeles County, the northern a part of the San Fernando Valley - because of the
restricted availability of recent product and excessive actual property prices in these
areas, and the San Joaquin Valley of California. The Firm continues to
analyze the market and consider expansions of commercial buildings for lease
both on our personal or in partnerships, as now we have carried out with the buildings
developed by TRC-MRC 1 and TRC-MRC 3, and pending improvement by TRC-MRC 4.
A possible drawback to our improvement technique is our distance from the
ports of Los Angeles and Lengthy Seashore compared to the warehouse/distribution
facilities situated within the Inland Empire, a big industrial space situated east of
Los Angeles, which continues its enlargement eastward past Riverside and San
Bernardino, to incorporate Perris, Moreno Valley, and Beaumont. As improvement in
the Inland Empire continues to maneuver east and farther away from the ports, the
potential drawback of our distance from the ports is being mitigated. Sturdy
demand for giant distribution services is driving improvement farther east in
a seek for massive, entitled parcels.
Throughout the quarter ended March 31, 2021, emptiness charges within the Inland Empire
decreased to a historic low of 1.9%, resulting in a rise in lease price of
1.3%, each setting new information. Demand for Inland Empire logistics house
continues to be robust, as web absorption reached 10 million sq. ft. As
lease charges enhance within the Inland Empire, we might expertise better pricing
benefits attributable to our decrease land foundation.
Throughout the quarter ended March 31, 2021, emptiness charges within the northern Los
Angeles industrial market, which incorporates the San Fernando Valley and Santa
Clarita Valley, decreased from 2.3% as of December 31, 2020 to 1.8%. Rents
stay at an all-time excessive. Common asking rents elevated by 9% over the prior
quarter.
We count on our business/industrial actual property improvement phase to proceed
to expertise prices, web of quantities capitalized, primarily associated to
skilled service charges, advertising prices, commissions, planning prices, and
staffing prices as we proceed to pursue improvement alternatives. These prices
are anticipated to stay in step with present ranges of expense with any
variability in future prices tied to particular absorption transactions in any
given 12 months.
The precise timing and completion of improvement is troublesome to foretell attributable to
the uncertainties of the market. Infrastructure improvement and advertising
actions and prices might proceed to extend over a number of years as we develop
our land holdings. We may also proceed to guage land sources to find out
the very best and finest makes use of for our land holdings. Future land gross sales are dependent
on market circumstances and particular alternatives. Our purpose sooner or later is to
enhance land worth and create future income progress by way of planning and
improvement of business and industrial properties.
In March and July 2020, in response to the COVID-19 pandemic, California took
actions to restrict publicity to the virus by way of restrictions on non-essential
companies and providers. Tenants started requesting varied types of hire aid
starting in March 2020 and all through the remainder of 2020. Though the requests
ranged in scope, the commonest request was for a full or partial hire
deferment for 3 months. The Firm agreed to defer hire for sure tenants
at TRCC, with the requirement that each one the deferred hire be totally repaid by
2021. The next desk units forth data concerning the cumulative
minimal deferred hire and picked up hire as of March 31, 2021.
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                                                                     Cumulative              Cumulative           Deferred Lease to
($ in hundreds, aside from                                      Deferred 

Lease due Deferred hire to be collected (remainder of tenants affected)

                 Impacted Tenants                  to COVID-19               Collected                of 2021
TRCC Leasing                               5                     $           118          $           51          $           67
Different Industrial Leases                    3                                  57                      24                      33
                                                   8             $           175          $           75          $          100


Actual Property - Resort/Residential:
We're within the preliminary levels of property improvement for this phase;
therefore, no revenues or earnings are attributed to this phase.
Resort/residential actual property improvement phase bills have been $553,000 for
the three months ended March 31, 2021, a lower of $73,000, or 12%, from
$626,000 for the three months ended March 31, 2020. The lower is attributed
to decrease payroll and inventory compensation prices, web of capitalization, of $23,000
and lowered normal and overhead allocations of $36,000.
Our long-term marketing strategy of creating the communities of MV, Centennial, and
Grapevine stays unchanged. As house purchaser traits change in California to a extra
suburban orientation and the economic system stabilizes, we imagine the notion of
land values will proceed to enhance. Lengthy-term macro fundamentals, primarily
California's inhabitants progress and family formation may also help housing
demand in our area. California additionally has a major documented housing
scarcity, which we imagine our communities will assist ease because the inhabitants base
inside California continues to develop. A lot of the expenditures and capital
funding to be incurred inside our resort/residential actual property phase will
proceed to deal with the next:
•Centennial - the accredited Centennial particular plan contains 19,333 residential
items and greater than 10.1 million sq. ft of business house. The Firm is
working with the County of Los Angeles to deal with litigation filed within the Los
Angeles Superior Courtroom. See Notice 12 (Commitments and Contingencies) of the Notes
to Unaudited Consolidated Monetary Statements for additional dialogue.
•Grapevine - on December 11, 2018, the Kern County Superior Courtroom dominated we had
to amend our EIR by making ready supplemental environmental documentation to
additional analyze the Grapevine venture's inside seize price (ICR), which is
the p.c of auto journeys remaining inside the venture. On December 10, 2019,
the Kern County Board of Supervisors adopted the supplemental re-circulated EIR
ready in response to the courtroom ruling and reapproved the event of
Grapevine unanimously. On January 10, 2020, an motion was filed in Kern County
Superior Courtroom pursuant to CEQA towards Kern County, regarding Kern County's
approval of the December 2019 re-entitlement, together with certification of the
remaining EIR. On January 22, 2021 the courtroom dominated in favor of the Firm and Kern
County on all points. See Notice 12 (Commitments and Contingencies) of the Notes
to Unaudited Consolidated Monetary Statements for additional dialogue.
•MV - a completely entitled venture has obtained approvals of Tentative Tract Map 1
for the primary 4 phases of improvement and approval of the business website
plan for the primary section of business improvement. The timing of the MV
improvement within the coming years will rely on the power of each the economic system
and the true property market, together with each major and second house markets. In
shifting the venture ahead, we are going to deal with the completion of the ultimate map for
the primary phases of MV, shopper and market analysis research, wonderful tuning of
improvement enterprise plans.
•Over the subsequent a number of years, we count on to discover funding alternatives for the
future improvement of our tasks. Such funding alternatives might come from a
number of sources, resembling joint ventures with monetary companions, debt
financing, or the Firm's issuance of further frequent inventory.
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Mineral Assets:
                                        Three Months Ended March 31,                           Change
($ in hundreds)                         2021                   2020                  $                     %
Mineral sources revenues
Oil and gasoline                        $          174          $       334$      (160)                  (48) %
Cement                                        466                  454                   12                     3  %
Rock mixture                                258                  242                   16                     7  %
Exploration leases                             25                   25                    -                     -  %
Water Gross sales                                 6,252                5,121                1,131                    22  %
Reimbursables and different                         1                    2                   (1)                  (50) %

Whole revenues from mineral sources $ 7,176$ 6,178

     $       998                    16  %

Whole mineral useful resource expenditure $ 5,047$ 3,878

    $     1,169                    30  %
Working revenue from mineral
sources                          $        2,129$     2,300$      (171)                   (7) %



•Mineral sources phase revenues have been $7,176,000 for the three months ended
March 31, 2021, a rise of $998,000, or 16%, from $6,178,000 for the three
months ended March 31, 2020. This enhance is primarily attributed to a
$1,131,000 enhance in water gross sales revenues. There have been extra water gross sales
alternatives in 2021 due to the dry 2021 winter that has led to a SWP
allocation of 5%. We bought 5,881 acre-feet and 4,625 acre-feet of water in 2021
and 2020, respectively. The rise in water gross sales revenues was partially
offset by a decline in oil royalties, which haven't returned to pre-pandemic
ranges.
•Mineral sources phase bills have been $5,047,000 for the three months ended
March 31, 2021, a rise of $1,169,000, or 30%, from $3,878,000 for the three
months ended March 31, 2020. This enhance in bills is primarily attributed
to a rise in water value of gross sales pushed by the elevated water gross sales quantity
famous above.
As anticipated adjustments come up sooner or later associated to groundwater administration in
California, resembling limits on groundwater pumping in over drafted water basins
exterior of our lands, we imagine that our water property, together with water banking
operations, floor water recharge packages, and entry to water contracts like
these now we have bought previously, will develop into much more necessary and
precious in servicing our tasks and offering alternatives for water gross sales
to 3rd events. With 2020 being a dry 12 months, native water market members
could have fewer different water sources in 2021, particularly given the present
5% SWP allocation. As such, the Firm anticipates further water gross sales
alternatives over the subsequent few months.
The value per barrel of oil has elevated over 30% from its December 31, 2020
ranges. California Assets Company, or CRC, has accredited permits and drill
websites on our land and has delayed the beginning of recent exploration because it evaluates
the market. A optimistic facet of our lease with CRC is that the accredited drill
websites are in an space of the ranch the place the event and manufacturing prices are
reasonable because of the comparatively shallow depths being drilled.
Farming:
                                       Three Months Ended March 31,                           Change
($ in hundreds)                        2021                   2020                  $                     %
Farming revenues
Almonds                           $          304          $       861$      (557)                   (65) %
Pistachios                                    14                   34                  (20)                   (59) %
Wine grapes                                   16                    -                   16                    100  %
Hay                                          129                   47                   82                    174  %
Different                                        144                   10                  134                  1,340  %
Whole farming revenues            $          607          $       952$      (345)                   (36) %
Whole farming bills            $        1,478$     1,702$      (224)                   (13) %
Working revenue (loss) from
farming                           $         (871)         $      (750)$      (121)                    16  %


•Farming phase revenues have been $607,000 for the three months ended March 31,
2021, a lower of $345,000, or 36%, from $952,000 throughout the identical interval in
2020. The adjustments are primarily attributable to:
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•Lowered almond gross sales revenues of $557,000 attributed to a 138,000 pound
discount within the variety of kilos bought attributable to timing. Moreover, there was a
36% lower within the promoting worth of almonds, pushed by report 2020 California
almond crop yields.
•Different revenues elevated $134,000, ensuing from larger water reimbursements
from a farming land lease.
•Farming phase bills have been $1,478,000 for the three months ended March 31,
2021, a lower of $224,000, or 13%, from $1,702,000 throughout the identical interval in
2020. The lower is attributed to a $130,000 lower in value of gross sales attributable to
decrease almond gross sales volumes and a $100,000 lower in depreciation and
amortization.
Our almond, pistachio, and wine grape crop gross sales are extremely seasonal with most
of our gross sales occurring throughout the third and fourth quarters. Nut and grape crop
markets are significantly delicate to the dimensions of every 12 months's world crop and the
demand for these crops. As witnessed in 2020, massive crop yields in California
and overseas can quickly depress costs. Tariffs from China and India, that are
main clients of almonds and pistachios, could make American merchandise much less
aggressive and push clients to change to a different producing nation.
Climate circumstances may influence the variety of tree and vine dormant hours,
that are integral to tree and vine progress. We won't know the influence of
present climate circumstances on 2021 manufacturing till the summer season of 2021. Thus
far, now we have skilled a heat winter, which reduces the variety of chilling
hours for our pistachio and almond bushes. Previously, this has had a really
hostile impact on pistachio yields. The present SWP allocation of 5% is
insufficient for our farming wants. As such, administration will search out alternate
sources of water and can incur further water supply costs, which can
enhance total 2021 crop manufacturing prices.
The Firm's agribusiness operations are deemed important and have been allowed
to function underneath California's COVID-19 restrictions. The Firm continues to
present its staff with face masks and security coaching to advertise a secure
working surroundings. As in 2020, COVID-19 restrictions haven't had a measurable
influence on the Firm's farming operations in 2021 to-date.
Lastly, the influence of state floor water administration legal guidelines on new plantings and
persevering with crop manufacturing stays unknown. Water supply and water
availability continues to be a long-term concern inside California. Any
limitation of supply of SWP water and the absence of accessible alternate options
throughout drought intervals might probably trigger everlasting injury to orchards and
vineyards all through California. Whereas this might influence us, we imagine now we have
ample water sources accessible to satisfy our necessities for the rest
of 2021 and into the long run.
Ranch Operations:
                                           Three Months Ended March 31,                            Change
($ in hundreds)                             2021                   2020                  $                     %
Ranch Operations revenues
Recreation administration and different 1           $           646          $       458$       188                    41  %
Grazing                                           397                  405                   (8)                   (2) %

Whole Ranch Working Income $ 1,043 $ 863

         $       180                    21  %

Whole Ranch Working Bills $ 1,187 $ 1,406

         $      (219)                  (16) %

Working loss associated to the operation of the ranch $ (144) (543) $

         $       399                   (73) %

1 Recreation administration and different revenue consists of revenue from searching, filming, the desert searching membership (the primary highland fowl searching membership) and different ancillary actions.



•Ranch operations revenues have been $1,043,000 for the three months ended March 31,
2021, a rise of $180,000, or 21%, from $863,000 for a similar interval in
2020. The rise in revenues is attributed to a rise in movie location price
revenues of $146,000, pushed by elevated demand, ensuing from closures of
comparable filming areas in LA County due to COVID-19 restrictions. The
the rest of the rise is attributed to a $38,000 enhance in guided hunts,
which noticed much less exercise throughout 2020 attributable to COVID-19 restrictions.
•Ranch operations bills have been $1,187,000 for the three months ended March 31,
2021, a lower of $219,000, or 16%, from $1,406,000 for a similar interval in
2020. This decline is essentially attributed to declines in payroll attributable to lowered
staffing ranges as in comparison with the prior 12 months.
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Company and Different:
Company normal and administrative prices have been $2,291,000 for the three months
ended March 31, 2021, a lower of $242,000, or 10%, from $2,533,000 for the
similar interval in 2020. The lower is primarily attributed to lowered payroll and
inventory compensation, web of capitalization, of $310,000, which resulted from
components such because the 2020 proper sizing initiative and the latest departure of the
Firm's normal counsel. This lower was offset by a $60,000 enhance in
insurance coverage expense.
Joint Ventures:
                                      Three Months Ended March 31,                           Change
($ in hundreds)                        2021                  2020                  $                     %
Fairness in earnings (loss)
Petro Journey Plaza Holdings, LLC  $         146          $     1,523$    (1,377)                   (90) %
5 West Parcel, LLC                         -                   (1)                   1                   (100) %
18-19 West, LLC                             (17)                 (15)                  (2)                    13  %
TRCC/Rock Outlet Middle, LLC               (344)                (406)                  62                    (15) %
TRC-MRC 1, LLC                               43                   20                   23                    115  %
TRC-MRC 2, LLC                              168                  172                   (4)                    (2) %
TRC-MRC 3, LLC                              (55)                  62                 (117)                  (189) %

Whole fairness in revenue (loss) $ (59) $ 1,355

   $    (1,414)                  (104) %



•Fairness in losses have been $59,000 for the three months ended March 31, 2021, a
lower of $1,414,000 or 104%, from $1,355,000 throughout the identical interval in 2020.
The adjustments are primarily attributed to the next:
•For the quarter, the Petro Journey Plaza Holdings three way partnership skilled
decrease gasoline margins attributable to larger gasoline prices. Moreover, full-service
restaurant margins decreased attributable to working capability limitations underneath the
California's Blueprint for a Safer Economic system. Full-service eating places started
reopening throughout the second quarter as an infection and hospitalization charges have
dropped, permitting for larger working capability.
Together with offering aid to sure tenants, the TRCC/Rock Outlet
Middle agreed to defer hire for sure tenants because of the closure of the outlet
heart from March 20, 2020 by way of Might 27, 2020. The next desk units forth
data concerning the minimal rents billed and deferred to-date on the
TRCC/Rock Outlet Middle property degree for the three months ended March 31,
2021. TRCC/Rock Outlet Middle is continuous to work with two of its tenants to
doc short-term hire fee aid by way of hire deferrals. We proceed to
assess the chance of amassing excellent receivables associated to the 2
tenants which might be at the moment in on-going negotiations. Administration will proceed to
monitor every negotiation diligently, and when decided collectability shouldn't be
possible, will reserve accordingly.
                                                          Cumulative                                         Deferred Lease to be
($ in hundreds, besides                               Deferred Lease due         Cumulative Deferred           Collected remainder of
variety of tenants)             Tenants1                  to COVID-19               Lease Collected                   2021
Lease Deferral Agreements           8                  $           217          $               130          $               87
Lease Abatement Agreements         17                              575                            N/A2                        N/A2
On-Going Deferral
Negotiations                       2                                -                            -                           -

                                  27                  $           792          $               130          $               87

1 Excludes share of tenants paying hire. 2 There isn’t any subsequent assortment to be carried out within the context of a hire discount state of affairs.



Please check with "Non-GAAP Monetary Measures" for additional monetary dialogue
of the outcomes of our joint ventures.
Basic Outlook
The operations of the Firm are seasonal and future outcomes of operations
can't reliably be predicted based mostly on quarterly outcomes. Traditionally, the
Firm's largest percentages of farming revenues are acknowledged throughout the
third and fourth quarters of the fiscal 12 months. Actual property exercise and leasing
actions are depending on market circumstances and particular alternatives and
due to this fact are troublesome to foretell from interval to interval.
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The COVID-19 pandemic and ensuing world financial disruptions have impacted
our operations and are anticipated to proceed to influence our operations for the
foreseeable future. For an in depth dialogue of the pandemic and its anticipated
results, check with the part above titled "The COVID-19 Pandemic" and "Outcomes
of Operations by Section."
For additional dialogue of the dangers and uncertainties that might probably
adversely have an effect on us, please check with Half I, Merchandise 7 - "Administration's Dialogue
and Evaluation of Monetary Situation and Outcomes of Operations" within the Firm's
Annual Report on Kind 10-Okay for the 12 months ended December 31, 2020, or Annual
Report, and to Half I, Merchandise 1A - "Threat Elements" of our Annual Report. We
proceed to be concerned in varied authorized proceedings associated to leased acreage.
For an additional dialogue, please check with Notice 12 (Commitments and
Contingencies) of the Notes to Unaudited Consolidated Monetary Statements in
this report.
Revenue Taxes
For the three months ended March 31, 2021, the Firm had web revenue tax
expense of $21,000 in comparison with $512,000 for the three months ended March 31,
2020. The efficient tax charges approximated -2% and -298% for the three months
ended March 31, 2021 and 2020, respectively. As of March 31, 2021, revenue tax
receivables have been $1,148,000. The Firm classifies curiosity and penalties
incurred on tax funds as revenue tax bills. The Firm acknowledged revenue
tax expense primarily as a result of everlasting variations associated to Part 162(m)
limitations and discrete tax expense related to inventory compensation. The
Part 162(m) compensation deduction limitations occurred attributable to adjustments in tax
legislation arising from the 2017 Tax Cuts Jobs Act. The discrete merchandise was triggered
when inventory grants have been issued to members at a worth lower than the unique
grant worth, inflicting a deferred tax shortfall. The shortfall acknowledged throughout
the quarter represents the reversal of extra deferred tax property acknowledged in
prior intervals. The popularity of the shortfall shouldn't be anticipated to have an
influence on the Firm's present revenue tax payable.
Money Stream and Liquidity
Our monetary place permits us to pursue our methods of land entitlement,
improvement, and conservation. Accordingly, now we have established well-defined
priorities for our accessible money, together with investing in core working
segments to realize worthwhile future progress. We have now traditionally funded our
operations with money flows from working actions, funding proceeds, and
short-term borrowings from our financial institution credit score services. Previously, now we have additionally
issued frequent inventory and used the proceeds for capital funding actions.
To reinforce shareholder worth over the long-term, we are going to proceed to make
investments in our actual property segments to safe land entitlement approvals,
construct infrastructure for our developments, guarantee ample future water
provides, and supply funds for normal land improvement actions. Inside our
farming phase, we are going to make investments as wanted to enhance effectivity and
add capability to its operations when it's worthwhile to take action.
Our money, money equivalents and marketable securities totaled $52,286,000 as of
March 31, 2021, a lower of $5,805,000 from $58,091,000 as of December 31,
2020.
The next desk reveals our money move actions for the three months ended
March 31,
(in hundreds)                2021           2020
Working actions       $   3,714$  4,037
Investing actions       $ (11,679)$ (2,802)
Financing actions       $  (2,032)$ (3,293)


Working Actions
Throughout the first three months of 2021, the Firm's operations supplied
$3,714,000. The first driver included assortment of excellent receivables.
Throughout the first three months of 2020, the Firm's operations supplied
$4,037,000. The first drivers have been collections of receivables of $3,048,000,
primarily attributed to farming.
Investing Actions
Throughout the first three months of 2021, investing actions used $11,679,000.
The Firm made capital expenditures, inclusive of capitalized curiosity and
payroll (unique of inventory compensation), of $5,218,000, which incorporates
predevelopment actions for our grasp deliberate communities; $1,064,000
consisting of planning and allowing primarily associated to the preparation of
remaining maps for Part 1 of MV; expenditures regarding litigation of $293,000
for Grapevine, and prices associated to litigation protection for Centennial of
$529,000. At TRCC, we spent $721,000 on water therapy infrastructure
enhancements and engineering and design efforts for the brand new speculative constructing
and the residential group at TRCC-East. Inside our farming phase, we spent
$2,178,000 creating new almond orchards, which incorporates cultural prices for
2021 for orchards not at the moment in manufacturing and changing equipment and
gear. We additionally invested $5,715,000 in marketable securities. Lastly, the
Firm used $1,653,000 to accumulate long-term water property.
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Throughout the first three months of 2020 investing actions used $2,802,000. The
Firm made capital expenditures, inclusive of capitalized curiosity and payroll
(unique of inventory compensation), of $4,948,000 which incorporates predevelopment
actions for our grasp deliberate communities, consisting of normal planning
and allowing of $954,000 for MV; expenditures regarding litigation of
$729,000 for Grapevine, and prices associated to litigation protection for Centennial
of $804,000. At TRCC, we spent $868,000 on water therapy infrastructure
enhancements and normal planning. Inside our farming phase, we spent
$1,550,000 creating new almond orchards and changing equipment and gear.
Additionally, inside investing actions, we had funding safety maturities of
$8,956,000 of which $4,025,000 was reinvested. Lastly, the Firm used
$2,635,000 to accumulate long-term water property.
As we transfer ahead, we are going to proceed to make use of money from operations, proceeds from
the maturity of securities, and anticipated distributions from joint ventures to
fund actual property venture investments, together with the investments summarized
under.
Our estimated capital funding, inclusive of capitalized curiosity and payroll,
for the rest of 2021 is primarily associated to our actual property tasks.
These estimated investments embrace roughly $6,209,000 of infrastructure
improvement at TRCC-East to help continued business retail and industrial
improvement and to broaden water services to help future anticipated
absorption. We additionally plan to take a position roughly $3,487,000 to proceed the
improvement of recent almond orchards and vineyards, and to switch farm gear.
The farm investments are a part of a long-term farm administration program to
redevelop declining orchards and vineyards to take care of and enhance future farm
revenues. Lastly, we count on to take a position as much as $7,667,000 for land planning,
litigation/appeals, mapping, federal and state company allowing actions, and
improvement actions at MV, Centennial, and Grapevine throughout the the rest of
2021.
We capitalize curiosity value as a price of the venture solely throughout the interval for
which actions essential to organize an asset for its meant use are ongoing,
supplied expenditures for the asset have been made and curiosity value has been
incurred. Capitalized curiosity for the three months ended March 31, 2021 and
2020, was $624,000 and $749,000, respectively, and is assessed inside actual
property improvement. We additionally capitalized payroll prices associated to improvement,
pre-construction, and development tasks which aggregated $519,000 and
$991,000 for the three months ended March 31, 2021 and 2020, respectively.
Expenditures for repairs and upkeep are expensed as incurred.
Financing Actions
Throughout the first three months of 2021, financing actions used $2,032,000,
which was attributable to long-term debt service of $1,066,000 and tax funds
on vested share grants of $966,000.
Throughout the first three months of 2020, financing actions used $3,293,000,
which was attributable to long-term debt service of
$1,725,000 and tax funds on vested share grants of $1,568,000.
It's troublesome to precisely predict money flows because of the nature of our
companies and fluctuating financial circumstances. Our earnings and money flows will
be affected from interval to interval by the commodity nature of our farming and
mineral operations, the timing of gross sales and leases of property inside our
improvement tasks, and the start of improvement inside our residential
tasks. The timing of gross sales and leases inside our improvement tasks is
troublesome to foretell because of the time essential to finish the event
course of and negotiate gross sales or lease contracts. Usually, the timing facet of land
improvement can result in sure years or intervals having totally different earnings than
comparable intervals. Though California's vaccination efforts seem promising,
we are going to proceed to guage our operations for expense reductions and money
financial savings. Primarily based on our expertise, and assuming the impacts of the COVID-19 do
not materially worsen, we imagine we could have ample money flows, money
balances, and availability on our line of credit score (mentioned under) over the subsequent
twelve months to fund inside operations. COVID-19 restrictions haven't
impacted our means to entry conventional funding sources. As we transfer ahead
with the completion of the litigation, allowing and engineering design for our
grasp deliberate communities and put together to maneuver into the event stage, we
might want to safe further funding by way of the issuance of fairness and safe
different types of financing resembling joint ventures and presumably debt financing.
We constantly consider our short-term and long-term capital funding wants.
Primarily based on the timing of capital investments, we might complement our present money,
marketable securities, and operational funding sources by way of the sale of
frequent inventory and the incurrence of further debt.
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Capital Construction and Monetary Situation
At March 31, 2021, whole capitalization at guide worth was $502,160,000,
consisting of $56,012,000 of debt and $446,148,000 of fairness, leading to a
debt-to-total-capitalization ratio of roughly 11.2%.
On October 13, 2014, the Firm as borrower, entered into an Amended and
Restated Credit score Settlement, a Time period Notice and a Revolving Line of Credit score Notice, with
Wells Fargo, or collectively the Credit score Facility. The Credit score Facility added a
$70,000,000 time period mortgage, or Time period Mortgage, to the then present $30,000,000 revolving
line of credit score, or RLC. In August 2019, the Firm amended the Time period Notice
(Amended Time period Notice) and prolonged its maturity to June 2029 and amended the RLC
to broaden the capability from $30,000,000 to $35,000,000 and prolong the maturity
to October 5, 2024.
The Amended Time period Notice had a $53,881,000 steadiness as of March 31, 2021. The
rate of interest every year relevant to the Amended Time period Mortgage is LIBOR (as outlined
within the Amended Time period Notice) plus a margin of 170 foundation factors. The rate of interest
for the time period of the Amended Time period Notice has been fastened by way of the usage of an
rate of interest swap at a price of 4.16%. The Amended Time period Notice requires month-to-month
amortization funds pursuant to a schedule set forth within the Amended Time period Notice,
with the ultimate excellent principal quantity due June 5, 2029. The Amended Credit score
Facility is secured by the Firm's farmland and farm property, which embrace
gear, crops and crop receivables; the PEF energy plant lease and lease website;
and associated accounts and different rights to fee and stock.
The RLC had no excellent steadiness as of March 31, 2021 and December 31, 2020.
On the Firm's choice, the rate of interest on this line of credit score can float at
1.50% over a particular LIBOR price or will be fastened at 1.50% above LIBOR for a
fastened price time period. Throughout the time period of this RLC (which matures in October 2024),
the Firm can borrow at any time and partially or wholly repay any excellent
borrowings after which re-borrow, as essential.
Any future borrowings underneath the RLC are anticipated for use for ongoing working
capital necessities and different normal company functions. To take care of
availability of funds underneath the RLC, undrawn quantities underneath the RLC will accrue a
dedication price of 10 foundation factors every year. The Firm's means to borrow
further funds sooner or later underneath the RLC is topic to compliance with
sure monetary covenants and guaranteeing representations and warranties,
that are typical in one of these borrowing association.
The Amended Credit score Facility requires compliance with three monetary covenants:
(a) whole liabilities divided by tangible web price not better than 0.75 to 1.0
at every quarter finish; (b) a debt service protection ratio not lower than 1.25 to
1.00 as of every quarter finish on a rolling 4 quarter foundation; and (c) keep
liquid property equal to or better than $20,000,000. At March 31, 2021 and
December 31, 2020, the Firm was in compliance with these monetary covenants.
The Amended Credit score Facility additionally incorporates customary destructive covenants that
restrict the flexibility of TRC to, amongst different issues, make capital expenditures,
incur indebtedness and difficulty guaranties, consummate sure property gross sales,
acquisitions or mergers, make investments, pay dividends or repurchase inventory, or
incur liens on any property.
The Amended Credit score Facility incorporates customary occasions of default, together with:
failure to make required funds; failure to adjust to phrases of the Amended
Credit score Facility; chapter and insolvency; and a change in management with out
consent of financial institution (which consent won't be unreasonably withheld). The Amended
Credit score Facility incorporates different customary phrases and circumstances, together with
representations and warranties, that are typical for credit score services of this
kind.
The Firm additionally has a $4,750,000 promissory be aware settlement whose principal and
curiosity due month-to-month started October 1, 2013. The rate of interest on this promissory
be aware is 4.25% every year, with principal and curiosity funds ending on
September 1, 2028. The steadiness as of March 31, 2021 was $2,131,000.
Present and future capital useful resource necessities might be supplied primarily from
present money and marketable securities, money move from ongoing operations,
distributions from joint ventures, proceeds from the sale of developed and
undeveloped land parcels, potential gross sales of property, further use of debt or
drawdowns towards our line of credit score, proceeds from the reimbursement of public
infrastructure prices by way of CFD bond debt (described under underneath "Off-Steadiness
Sheet Preparations"), and the issuance of further frequent inventory.
In Might 2019, we filed an up to date shelf registration assertion on Kind S-3, which
went efficient in Might 2019. Beneath the shelf registration assertion, we might supply
and promote sooner or later a number of choices of, frequent inventory, most well-liked inventory,
debt securities, warrants or any mixture of the foregoing. The shelf
registration permits for environment friendly and well timed entry to capital markets and when
mixed with our different potential funding sources simply famous, offers us with a
number of capital funding choices that may then be used and appropriately
matched to the funding wants of the Firm.
Though now we have a robust liquidity place at March 31, 2021 with $52,286,000
in money and securities and $35,000,000 accessible on our RLC to satisfy any
short-term liquidity wants, now we have taken steps to maximise optimistic money move,
in case a scarcity of liquidity within the economic system limits our entry to 3rd social gathering
funding by responsibly limiting money expenditures to the extent sensible. See
Notice 3 (Marketable Securities) and Notice 7 (Line of Credit score and Lengthy-Time period Debt) of
the Notes to Unaudited Consolidated Monetary Statements for extra data.
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We proceed to count on that substantial investments might be required to develop
our land property. To fulfill these capital necessities, we might have to safe
further debt financing and proceed to resume our present credit score services.
Along with debt financing, we are going to use different capital alternate options resembling
joint ventures with monetary companions, gross sales of property, and the issuance of
frequent inventory. We'll use a mixture of the above funding sources to correctly
match funding necessities with the property or improvement venture being funded.
There isn't any assurance that we are able to receive financing or that we are able to receive
financing at favorable phrases. We imagine now we have ample capital sources to
fund our money wants and our capital funding necessities within the near-term as
described earlier within the money move and liquidity discussions.
Contractual Money Obligations
The next desk summarizes our contractual money obligations and business
commitments as of March 31, 2021, to be paid over the subsequent 5 years and
thereafter:
                                                                            Funds Due by Interval
(In hundreds)                            Whole            One Yr or Much less          Years 2-3          Years 4-5          Thereafter
Contractual Obligations:
Estimated water funds               $ 269,117          $         10,194          $  21,314$  22,613$  214,996
Lengthy-term debt                            56,012                     4,338              9,276             10,124              32,274
Curiosity on long-term debt                12,318                     2,236              3,909              3,099               3,074

Money contract commitments                  6,611                     3,919              1,656                518                 518
Outlined Profit Plan                       4,303                       299                666                843               2,495
SERP                                       5,101                       527              1,038              1,040               2,496
Tejon Ranch Conservancy                      600                       600                  -                  -                   -
Financing charges                               163                       163                  -                  -                   -
Working lease                               27                        16                 11                  -                   -

Whole contractual obligations $ 354,252 $ 22,292

$ 37,870$ 38,237$ 255,853


The classes above embrace buy obligations and different long-term
liabilities mirrored on our steadiness sheet underneath GAAP. A "buy obligation"
is outlined in Merchandise 303(a)(5)(ii)(D) of Regulation S-Okay as "an settlement to
buy items or providers that's enforceable and legally binding on the
registrant that specifies all important phrases, together with: fastened or minimal
portions to be bought; fastened, minimal or variable worth provisions; and the
approximate timing of the transaction." Primarily based on this definition, the desk
above contains solely these contracts that embrace fastened or minimal obligations.
It doesn't embrace regular purchases, that are made within the atypical course of
enterprise.
Estimated water funds embrace the Nickel Household, LLC water contract, which
obligates us to buy 6,693 acre-feet of water yearly by way of 2044 and SWP
contracts with Wheeler Ridge Maricopa Water Storage District, TCWD, Tulare Lake
Basin Water Storage District, and Dudley-Ridge Water Storage District. These
contracts for the availability of future water run by way of 2035. Please check with Notice
5 (Lengthy-Time period Water Belongings) of the Notes to Consolidated Monetary Statements for
further data concerning water property.
Our money contract commitments include contracts in varied levels of
completion associated to infrastructure improvement inside our industrial
developments and entitlement prices associated to our industrial and residential
improvement tasks. Additionally included within the money contract commitments are
working lease obligations. Our working lease obligations are for workplace
gear. At the moment, we shouldn't have any capital lease obligations or
buy obligations excellent.
As mentioned in Notice 13 (Retirement Plans) of the Notes to Unaudited
Consolidated Monetary Statements, now we have long-term liabilities for deferred
worker compensation, together with pension and supplemental retirement plans.
Funds within the above desk replicate estimates of future outlined profit plan
contributions from the Firm to the plan belief, estimates of funds to
staff from the plan belief, and estimates of future funds to staff
from the Firm which might be within the SERP program. We count on to contribute $165,000
to our outlined profit plan in 2021.
Our monetary obligations to the Tejon Ranch Conservancy are prescribed within the
Conservation Settlement, as mentioned in Notice 12 (Commitments and Contingencies)
of the Notes to Unaudited Consolidated Monetary Statements. Our advances to the
Tejon Ranch Conservancy are depending on the prevalence of sure occasions and
their timing and are due to this fact topic to alter in quantity and interval. The
quantities included above are the minimal quantities we anticipate contributing
by way of the 12 months 2021, at which period our present contractual obligation
terminates. See Notice 12 (Commitments and Contingencies) of the Notes to
Unaudited Consolidated Monetary Statements for a dialogue of litigation
associated to fee obligations to the Tejon Ranch Conservancy.
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Off-Steadiness Sheet Preparations
The next desk reveals contingent obligations now we have with respect to sure
bonds issued by the CFDs:
                                                                      Quantity of Dedication Expiration Per Interval
($ in hundreds)                              Whole               < 1 12 months           2 -3 Years           4 -5 Years           After 5 Years
Different Industrial Commitments:
Standby letter of credit score                 $       4,393$   4,393          $         -          $         -          $            -

Whole different business commitments $ 4,393$ 4,393

        $         -          $         -          $            -


The Tejon Ranch Public Amenities Financing Authority, or TRPFFA, is a joint
powers authority fashioned by Kern County and TCWD to finance public infrastructure
inside the Firm's Kern County developments. TRPFFA created two CFDs, the West
CFD and the East CFD. The West CFD has positioned liens on 420 acres of the
Firm's land to safe fee of particular taxes associated to $28,620,000 of bond
debt bought by TRPFFA for TRCC-West. The East CFD has positioned liens on 1,931 acres
of the Firm's land to safe funds of particular taxes associated to $75,965,000
of bond debt bought by TRPFFA for TRCC-East. At TRCC-West, the West CFD has no
further bond debt accredited for issuance. At TRCC-East, the East CFD has
roughly $44,035,000 of further bond debt licensed by TRPFFA.
In reference to the sale of bonds there's a standby letter of credit score for
$4,393,000 associated to the issuance of East CFD bonds. The standby letter of
credit score is in place to offer further credit score enhancement and canopy
roughly two years' price of curiosity on the excellent bonds. This letter
of credit score won't be drawn upon except the Firm, as the most important landowner in
the CFD, fails to make its property tax funds. As improvement happens inside
TRCC-East, there's a mechanism within the bond paperwork to scale back the quantity of
the letter of credit score. The Firm believes as of March 31, 2021, that the letter
of credit score will probably by no means be drawn upon. This letter of credit score is for a
two-year interval and might be renewed in two-year intervals as essential. The
annual value associated to the letter of credit score is roughly $68,000. The
evaluation of every particular person property bought or leased inside every CFD shouldn't be
determinable right now as a result of it's based mostly on the present tax price and the
assessed worth of the property on the time of sale or on its assessed worth at
the time it's leased to a third-party. Accordingly, the Firm shouldn't be required
to acknowledge an obligation as of March 31, 2021.
As of March 31, 2021, mixture excellent debt of unconsolidated joint
ventures was $132,401,000. We supplied a assure on $117,748,000 of this debt,
regarding our joint ventures with Rockefeller and Majestic. Due to
optimistic money move technology inside the Rockefeller and Majestic joint
ventures, we, as of March 31, 2021, don't count on the assure to be known as
upon. We don't present a assure on the $14,653,000 of debt associated to our
three way partnership with TA/Petro.
                                       39
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Non-GAAP Monetary Measures
EBITDA represents earnings earlier than curiosity, taxes, depreciation, and
amortization, a non-GAAP monetary measure, and is utilized by us and others as a
supplemental measure of efficiency. We use Adjusted EBITDA to evaluate the
efficiency of our core operations, for monetary and operational determination
making, and as a supplemental or further technique of evaluating period-to-period
comparisons on a constant foundation. Adjusted EBITDA is calculated as EBITDA,
excluding inventory compensation expense. We imagine Adjusted EBITDA offers
traders related and helpful data as a result of it permits traders to view
revenue from our operations on an unleveraged foundation earlier than the consequences of taxes,
depreciation and amortization, and inventory compensation expense. By excluding
curiosity expense and revenue, EBITDA and Adjusted EBITDA enable traders to
measure our efficiency unbiased of our capital construction and indebtedness
and, due to this fact, enable for a extra significant comparability of our efficiency to
that of different firms, each in the true property trade and in different
industries. We imagine that excluding costs associated to share-based
compensation facilitates a comparability of our operations throughout intervals and amongst
different firms with out the variances brought on by totally different valuation
methodologies, the volatility of the expense (which is dependent upon market forces
exterior our management), and the assumptions and the number of award varieties {that a}
firm can use. EBITDA and Adjusted EBITDA have limitations as measures of our
efficiency. EBITDA and Adjusted EBITDA don't replicate our historic money
expenditures or future money necessities for capital expenditures or contractual
commitments. Whereas EBITDA and Adjusted EBITDA are related and broadly used
measures of efficiency, they don't characterize web revenue or money flows from
operations as outlined by GAAP. Additional, our computation of EBITDA and Adjusted
EBITDA will not be similar to comparable measures reported by different firms.
                                                                       Three Months Ended March 31,
($ in hundreds)                                                        2021                    2020
Internet loss                                                         $         (1,063)         $      (684)
Internet loss attributable to non-controlling curiosity                              (8)                  (2)
Internet loss attributable to frequent stockholders                               (1,055)                (682)
Curiosity, web
Consolidated                                                                   (7)                (228)
Our share of curiosity expense from unconsolidated joint ventures              624                  681
Whole curiosity, web                                                           617                  453
Revenue taxes                                                                   21                  512
Depreciation and amortization:
Consolidated                                                                  965                1,164

Our share of amortization of unconsolidated joint ventures

                                                              1,175                1,025
Whole depreciation and amortization                                         2,140                2,189
EBITDA                                                                      1,723                2,472
Inventory compensation expense                                                  1,276                1,225
Adjusted EBITDA                                                  $          2,999          $     3,697


Internet working revenue (NOI) is a non-GAAP monetary measure calculated as
working revenue, essentially the most instantly comparable monetary measure calculated and
offered in accordance with GAAP, excluding normal and administrative
bills, curiosity expense, depreciation and amortization, and achieve or loss on
gross sales of actual property. We imagine NOI offers helpful data to traders
concerning our monetary situation and outcomes of operations as a result of it primarily
displays these revenue and expense gadgets which might be incurred on the property degree.
Subsequently, we imagine NOI is a helpful measure for evaluating the working
efficiency of our actual property property.
                                                                          Three Months Ended March 31,
($ in hundreds)                                                           2021                   2020
Industrial/Industrial working revenue                               $          676          $       389
Plus: Industrial/Industrial depreciation and amortization                       116                  130
Plus: Basic, administrative, value of gross sales and different bills               1,338                1,579
Much less: Different revenues together with land gross sales                                      (434)                (466)
Whole Industrial/Industrial web working revenue                     $      

1,696 $ 1,632

                                       40
--------------------------------------------------------------------------------

($ in hundreds)                                                                 Three Months Ended March 31,
Internet working revenue                                                              2021                   2020
Pastoria Power Facility                                                    $        1,012$     1,065
TRCC                                                                                   318                  210
Communication leases                                                                   221                  209
Different business leases                                                                145                  148
Whole Industrial/Industrial web working revenue                            

$ 1,696$ 1,632


The Firm makes use of NOI of unconsolidated joint ventures as a measure of
monetary or working efficiency that's not particularly outlined by GAAP. We
imagine NOI of unconsolidated joint ventures offers traders with further
data regarding working efficiency of our unconsolidated joint
ventures. We additionally use this measure internally to watch the working
efficiency of our unconsolidated joint ventures. Our computation of this
non-GAAP measure will not be the identical as comparable measures reported by different
firms. This non-GAAP monetary measure shouldn't be thought-about as an
different to web revenue as a measure of the working efficiency of our
unconsolidated joint ventures or to money flows computed in accordance with GAAP
as a measure of liquidity, nor are they indicative of money flows from working
and monetary actions of our unconsolidated joint ventures.
The next schedule reconciles web revenue of unconsolidated joint ventures to
NOI of unconsolidated joint ventures. Please check with Notice 15 (Funding in
Unconsolidated and Consolidated Joint Ventures) of the Notes to Unaudited
Consolidated Monetary Statements for additional dialogue on joint ventures.
                                                                     Three Months Ended March 31,
($ in hundreds)                                                      2021                   2020
Internet revenue of unconsolidated joint ventures                     $         (167)         $     2,204
Curiosity expense of unconsolidated joint ventures                        1,232                1,057
Working revenue of unconsolidated joint ventures                        1,065                3,261

Depreciation of unconsolidated joint ventures 2,214

                1,929
Internet working revenue of unconsolidated joint ventures           $        

3 279 $ 5,190

                                       41

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